If the owner of the fishing trawler/fishing vessel/boat fails to pay the charges and other amounts payable to the Port Trust under its Regulations and if the owner of the fishing trawler/fishing vessel/boat failed to comply with the orders of the Deputy Conservator/Traffic Manager, the concerned fishing controller/fishing vessel/boat shall be seized by the Deputy Conservator/Traffic Manager and will be released only after payment of all the dues. A bare reading of the above provision makes it clear that the owner of the vessel is liable to pay the dues if any. In the present case, there being no dues to be collected from the owner of the vessel i.e., the petitioner, and admittedly, the dues claimed are in relation to the Company, the action of the respondents in detaining the Boat is unsustainable and without jurisdiction. In those circumstances, the writ petition is allowed. However, it is made clear that it would be open to the respondents to take all steps for collection of the amounts alleged to be due from M/s. Kaanha Shipping Private Limited, by following the procedure prescribed under law.
THE HONBLE SRI JUSTICE CHALLA KODANDA RAM
Writ Petition No.2791 of 2017
09-10-2017
K.V.Kalyan Shanker Petitioner
Visakhapatnam Port Trust and others.Respondents
Counsel for the petitioner: Mr.N.V.Sumanth
Counsel for respondents:Ms.V.Uma Devi
<GIST:
>HEAD NOTE:
?Cases cited:
1.AIR 1965 Supreme Court 40
THE HONBLE SRI JUSTICE CHALLA KODANDA RAM
WRIT PETITION No. 2791 OF 2017
O R D E R:
In this writ petition, proceedings, dated 28.07.2016, issued
by respondent No.1-Visakhapatnam Port Trust, are under
challenge.
Petitioner states that he is the owner of
Boat bearing registration No. VPT 20120040, which is used for the
purpose of carrying men and material to offshore work site. He
incidentally happens to be one of the Directors of M/s. Kaanha
Shipping Private Limited, which operates as stevedores in
respondent No.1-Port Trust handling all types of Cargos in the
Port. He further states that the said Boat was seized on 27.07.2017
by CISF personnel on the instructions of Marine Department.
When enquiries were made, he was informed that the Boat was
seized on account of the alleged dues owed by M/s. Kaanha
Shipping Private Limited. He also states that he is only one of the
Directors of the said Company and for the dues owed by it, he
cannot be made liable for the same and therefore, the respondents
to take action against the Company. The assertion of the petitioner
is that there is neither an agreement nor a provision which enable
the respondent authorities to attach/detain the Boat of the
petitioner, who is an individual, with regard to the dues of the
Company.
The respondents filed a counter-affidavit stating that they are
entitled to detain the Boat for the dues owed by the Company under
Regulation 7(2) of the Visakhapatnam Port Trust Fishing Harbour
Regulations, 1986 framed in exercise of statutory powers under the
Major Port Trust Act, 1963.
Sri N.V. Sumanth, learned counsel appearing for the
petitioner, by placing reliance on the judgment of the Honble
Supreme Court in Tata Engineering and Locomotive Company
Limited Vs. The State of Bihar and others , would submit that it is
well-settled that the Company is a separate corporate entity which
has its own legal existence and the same is different from the
shareholders of the Company. It is the specific contention of the
learned counsel for the petitioner that the petitioner cannot be made
liable to pay the dues of the Company.
Ms.V.Uma Devi, learned Standing Counsel appearing on
behalf of the respondents, reiterates the contentions made in the
counter-affidavit and would submit that the Company owes huge
amounts to the extent of Rs.4,47,78,833/- and further, the petitioner
had also executed a power of attorney in favour of his father to
represent the Company and to sign all the documents in relation to
it and therefore, the petitioner would be vicariously liable for the
dues owed by the Company and the action taken by the
respondents is not in violation of law.
Having considered the respective submissions, it may be
noted that the Honble Supreme Court in the judgment referred to
supra, while dealing with the legal status of the individual
shareholders vis--vis the legal entity, held as under:
The true legal position in regard to the character of a corporation or
a company which owes its incorporation to a statutory authority, is not in
doubt or dispute. The Corporation in law is equal to a natural person and
has a legal entity of its own. The entity of the Corporation is entirely
separate from that of its shareholders; it bears its own name and has a
seal of its own; its assets are separate and distinct from those of its
members; it can sue and be sued exclusively for its own purpose; its
creditors cannot obtain satisfaction from the assets of its members; the
liability of the members or shareholders is limited to the capital invested
by them, similarly the creditors of the members have no right to the
assets of the Corporation. This position has been well-established ever
since the decision in the case of Salomn v. Salomon and Company,
1897 AC 22 was pronounced in 1897; and indeed, it has always been
the well recognised principle of common law. However, in the course of
time the doctrine that the Corporation or a Company has a legal and
separate entity of its own has been subjected to certain exceptions by
the application of the fiction that the veil of the Corporation can be lifted
and its face examined in substance. The doctrine of the lifting of the veil
thus marks a change in the attitude that law had originally adopted
towards the concept of the separate entity or personality of the
Corporation. As a result of the impact of the complexity of economic
factors, judicial decisions have sometimes recognised exceptions to the
rule about the juristic personality of the Corporation. It may be that in the
course of time these exceptions may glow in number and to meet the
requirements of different economic problems.
It is not in dispute that the petitioner is the owner of the Boat
in question. It is also not in dispute that there is no claim against
the petitioner with respect to the Boat in his individual capacity. In
this connection, it is apt to quote Regulation 7(2) of the
Visakhapatnam Port Trust Fishing Harbour Regulations, 1986,
which reads thus:
If the owner of the fishing trawler/fishing vessel/boat fails to pay
the charges and other amounts payable to the Port Trust under its
Regulations and if the owner of the fishing trawler/fishing vessel/boat
failed to comply with the orders of the Deputy Conservator/Traffic
Manager, the concerned fishing controller/fishing vessel/boat shall be
seized by the Deputy Conservator/Traffic Manager and will be released
only after payment of all the dues.
A bare reading of the above provision makes it clear that the
owner of the vessel is liable to pay the dues if any. In the present
case, there being no dues to be collected from the owner of the
vessel i.e., the petitioner, and admittedly, the dues claimed are in
relation to the Company, the action of the respondents in detaining
the Boat is unsustainable and without jurisdiction.
In those circumstances, the writ petition is allowed.
However, it is made clear that it would be open to the respondents
to take all steps for collection of the amounts alleged to be due
from M/s. Kaanha Shipping Private Limited, by following the
procedure prescribed under law.
Consequently, the miscellaneous petitions, if any shall stand
disposed of. No costs.
________________________
CHALLA KODANDA RAM, J
Dt:09.10.2017
Writ Petition No.2791 of 2017
09-10-2017
K.V.Kalyan Shanker Petitioner
Visakhapatnam Port Trust and others.Respondents
Counsel for the petitioner: Mr.N.V.Sumanth
Counsel for respondents:Ms.V.Uma Devi
<GIST:
>HEAD NOTE:
?Cases cited:
1.AIR 1965 Supreme Court 40
THE HONBLE SRI JUSTICE CHALLA KODANDA RAM
WRIT PETITION No. 2791 OF 2017
O R D E R:
In this writ petition, proceedings, dated 28.07.2016, issued
by respondent No.1-Visakhapatnam Port Trust, are under
challenge.
Petitioner states that he is the owner of
Boat bearing registration No. VPT 20120040, which is used for the
purpose of carrying men and material to offshore work site. He
incidentally happens to be one of the Directors of M/s. Kaanha
Shipping Private Limited, which operates as stevedores in
respondent No.1-Port Trust handling all types of Cargos in the
Port. He further states that the said Boat was seized on 27.07.2017
by CISF personnel on the instructions of Marine Department.
When enquiries were made, he was informed that the Boat was
seized on account of the alleged dues owed by M/s. Kaanha
Shipping Private Limited. He also states that he is only one of the
Directors of the said Company and for the dues owed by it, he
cannot be made liable for the same and therefore, the respondents
to take action against the Company. The assertion of the petitioner
is that there is neither an agreement nor a provision which enable
the respondent authorities to attach/detain the Boat of the
petitioner, who is an individual, with regard to the dues of the
Company.
The respondents filed a counter-affidavit stating that they are
entitled to detain the Boat for the dues owed by the Company under
Regulation 7(2) of the Visakhapatnam Port Trust Fishing Harbour
Regulations, 1986 framed in exercise of statutory powers under the
Major Port Trust Act, 1963.
Sri N.V. Sumanth, learned counsel appearing for the
petitioner, by placing reliance on the judgment of the Honble
Supreme Court in Tata Engineering and Locomotive Company
Limited Vs. The State of Bihar and others , would submit that it is
well-settled that the Company is a separate corporate entity which
has its own legal existence and the same is different from the
shareholders of the Company. It is the specific contention of the
learned counsel for the petitioner that the petitioner cannot be made
liable to pay the dues of the Company.
Ms.V.Uma Devi, learned Standing Counsel appearing on
behalf of the respondents, reiterates the contentions made in the
counter-affidavit and would submit that the Company owes huge
amounts to the extent of Rs.4,47,78,833/- and further, the petitioner
had also executed a power of attorney in favour of his father to
represent the Company and to sign all the documents in relation to
it and therefore, the petitioner would be vicariously liable for the
dues owed by the Company and the action taken by the
respondents is not in violation of law.
Having considered the respective submissions, it may be
noted that the Honble Supreme Court in the judgment referred to
supra, while dealing with the legal status of the individual
shareholders vis--vis the legal entity, held as under:
The true legal position in regard to the character of a corporation or
a company which owes its incorporation to a statutory authority, is not in
doubt or dispute. The Corporation in law is equal to a natural person and
has a legal entity of its own. The entity of the Corporation is entirely
separate from that of its shareholders; it bears its own name and has a
seal of its own; its assets are separate and distinct from those of its
members; it can sue and be sued exclusively for its own purpose; its
creditors cannot obtain satisfaction from the assets of its members; the
liability of the members or shareholders is limited to the capital invested
by them, similarly the creditors of the members have no right to the
assets of the Corporation. This position has been well-established ever
since the decision in the case of Salomn v. Salomon and Company,
1897 AC 22 was pronounced in 1897; and indeed, it has always been
the well recognised principle of common law. However, in the course of
time the doctrine that the Corporation or a Company has a legal and
separate entity of its own has been subjected to certain exceptions by
the application of the fiction that the veil of the Corporation can be lifted
and its face examined in substance. The doctrine of the lifting of the veil
thus marks a change in the attitude that law had originally adopted
towards the concept of the separate entity or personality of the
Corporation. As a result of the impact of the complexity of economic
factors, judicial decisions have sometimes recognised exceptions to the
rule about the juristic personality of the Corporation. It may be that in the
course of time these exceptions may glow in number and to meet the
requirements of different economic problems.
It is not in dispute that the petitioner is the owner of the Boat
in question. It is also not in dispute that there is no claim against
the petitioner with respect to the Boat in his individual capacity. In
this connection, it is apt to quote Regulation 7(2) of the
Visakhapatnam Port Trust Fishing Harbour Regulations, 1986,
which reads thus:
If the owner of the fishing trawler/fishing vessel/boat fails to pay
the charges and other amounts payable to the Port Trust under its
Regulations and if the owner of the fishing trawler/fishing vessel/boat
failed to comply with the orders of the Deputy Conservator/Traffic
Manager, the concerned fishing controller/fishing vessel/boat shall be
seized by the Deputy Conservator/Traffic Manager and will be released
only after payment of all the dues.
A bare reading of the above provision makes it clear that the
owner of the vessel is liable to pay the dues if any. In the present
case, there being no dues to be collected from the owner of the
vessel i.e., the petitioner, and admittedly, the dues claimed are in
relation to the Company, the action of the respondents in detaining
the Boat is unsustainable and without jurisdiction.
In those circumstances, the writ petition is allowed.
However, it is made clear that it would be open to the respondents
to take all steps for collection of the amounts alleged to be due
from M/s. Kaanha Shipping Private Limited, by following the
procedure prescribed under law.
Consequently, the miscellaneous petitions, if any shall stand
disposed of. No costs.
________________________
CHALLA KODANDA RAM, J
Dt:09.10.2017
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